Massachusetts Bay Transportation Authority
MASSACHUSETTS BAY
TRANSPORTATION
AUTHORITY
COMMUTER RAIL
PROCUREMENT
REQUEST FOR PROPOSALS
INSTRUCTIONS TO
PROPOSERS
APPENDIX C FINANCIAL/PRICE PROPOSAL
INSTRUCTIONS
RFP No. 159-12
June 27, 2013
MBTA
Commuter Rail Procurement
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RFP
ITP
Appendix C - Financial/Price Proposal Instructions
RFP No. 159-12
Massachusetts Bay Transportation Authority
TABLE OF CONTENTS
C1.0
C2.0
C3.0
C4.0
C5.0
C6.0
General Instructions ......................................................................................................................... 1
C1.1 Specific Financial Price Proposal Instructions.................................................................... 1
Financial/Price Proposal Submittal .................................................................................................. 1
Financial Capacity Pass/Fail Evaluation Factor............................................................................... 1
C3.1 Objective ............................................................................................................................. 1
C3.2 Financial Capacity Information for Section 1 of the Financial/Price Proposal................... 1
Performance Guarantee Pass/Fail Evaluation Factor ....................................................................... 4
C4.1 Objective ............................................................................................................................. 4
C4.2 Performance Guarantee Information for Section 2 of the Financial/Price Proposal ........... 4
Firm Fixed Price .............................................................................................................................. 5
C5.1 Objective ............................................................................................................................. 5
C5.2 Firm Fixed Price Information for Section 3 of the Financial/Price Proposal ..................... 5
Format for Submission of the Financial/Price Proposal .................................................................. 6
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Appendix C – Financial/Price Proposal Instructions
RFP No. 159-12
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C1.0
General Instructions
This Appendix C (Financial/Price Proposal Instructions) to the Instructions to Proposers (ITP)
specifies the financing/pricing information to be submitted by all Proposers.
Each Proposer shall submit the information required by this Appendix C (Financial/Price Proposal
Instructions) in the organization and format specified herein. The Financial/Price Proposal shall be
organized in the format listed in Table C-1, and shall be clearly indexed. Each component of the
Financial/Price Proposal shall be clearly titled and identified.
All forms named herein are found in Appendix D (Forms) to the ITP unless otherwise noted.
Alterations to the forms will only be permitted (i) where specifically allowed, and/or (ii) to allow for
expansion of spaces for responses in order to accommodate inclusion of the information requested.
C1.1
Specific Financial Price Proposal Instructions
All financial information provided in the Financial/Price Proposal shall be in United States (US)
dollar currency only and all amounts shall be clearly identified and in accordance with Form FFP
(Firm Fixed Price). If there are any discrepancies between the hard copy and electronic copy of any
quantitative information provided in the Financial/Price Proposal, the hard copy version will prevail.
If there are any differences between the sum of individual line amounts and totals, the lower cost to
the MBTA will prevail.
C2.0
Financial/Price Proposal Submittal
The Proposer shall submit the information and forms identified in this Appendix C (Financial/Price
Proposal Instructions) in a separate, sealed container. Additionally, the information identified in
Section C3.0 (Financial Capacity Pass/Fail Evaluation Factor) and Section C4.0 (Performance
Guarantee Pass/Fail Evaluation Factor) shall be further separated from the information identified in
Section C5.0 (Firm Fixed Price) by submission in separate sealed envelopes.
The Proposer shall secure Form PP to the outside of the container containing the Financial/Price
Proposal. The signature requirements for Form PP are the same as the signature requirements for the
Form of Proposal. (See Section B2.2(A) of Appendix B (Operations and Management Proposal
Instructions)).
C3.0
Financial Capacity Pass/Fail Evaluation Factor
C3.1
Objective
To identify Proposers with demonstrated capability to undertake the financial responsibilities
associated with the Contract.
C3.2
Financial Capacity Information for Section 1 of the Financial/Price Proposal
The Proposer shall clearly identify any differences between the financial capacity information
submitted in the Proposal and the information submitted in the Statement of Qualifications (SOQ).
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Appendix C – Financial/Price Proposal Instructions
RFP No. 159-12
Massachusetts Bay Transportation Authority
The Proposer shall submit the following information for the Proposer, all Equity Members and any
Financially Responsible Party:
A)
Audited financial statements (in printed form and on a CD) for all periods
subsequent to those included in the SOQ, audited by a certified public accountant
in accordance with U.S. Generally Accepted Accounting Principles (GAAP) or
International Financial Reporting Standards (IFRS); and
B)
Interim unaudited statements (in printed form and on a CD), or updated press
releases relating to financial updates, for the period since the most recent completed
fiscal year for the above entities.
Financial statement information must include:
1)
Opinion Letter (Auditor’s Report);
2)
Balance Sheet;
3)
Income Statement;
4)
Statement of Changes in Cash Flow; and
5)
Footnotes audited by a certified public accountant in accordance with
GAAP or IFRS.
The Financial statements, whether for the most recent completed fiscal year or for the period since
the most recent completed fiscal year, must meet the following requirements:
a)
U.S. GAAP/IFRS – Financial statements must be prepared in
accordance with GAAP or IFRS. If financial statements are
prepared in accordance with principles other than GAAP or IFRS, a
letter must be provided from a certified public accountant discussing
the areas of the financial statements that would be affected by a
conversion to GAAP or IFRS. A restatement of the financial
information in accordance with GAAP or IFRS is not required.
b)
U.S. Dollars – Financial statements must be provided in US dollars.
If financial statements are not available in US dollars, the Proposer
must include income statements and balance sheets for the
applicable time periods converted to US dollars by a certified public
accountant, along with an explanation of the assumptions relating to
the conversion rates.
c)
Audited – Fiscal year-end financial statements must be audited by
an independent party qualified to render audit opinions (e.g., a
certified public accountant). If audited financials are not available
for the Proposer, or any Equity Member or Financially Responsible
Party, the Financial/Price Proposal shall include unaudited financial
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Appendix C – Financial/Price Proposal Instructions
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statements for such entity, certified as true, correct and accurate by
the chief financial officer or treasurer of the entity.
d)
English – Financial statement information must be prepared in
English. If audited financial statements are prepared in a language
other than English, translations of all financial statement information
must be accompanied with the original financial statement
information.
Other information and requirements:
i)
Newly Formed Entity - If the Proposer is a newly formed
entity, the Proposer shall expressly state that the Proposer is
a newly formed entity and does not have independent
financial statements.
ii)
Financially Responsible Party Letter of Support - If
financial statements of a parent company or affiliate
company (“Financially Responsible Party”) are provided to
demonstrate financial capability of an Equity Member, an
appropriate letter from the parent company or affiliate
company must be provided confirming that it will guarantee
all the obligations of the entity as applicable, with respect to
the Contract.
If a Financially Responsible Party was identified for the
Proposer in the SOQ, the Proposer must provide a
description of how that parent company or affiliate company
will financially support the Proposer and include copies of
all documents intended to provide that support (guaranties,
letters of credit, etc.).
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iii)
Securities and Exchange Commission Filings - If the
Proposer or any other entity for which financial information
is submitted hereby files reports with the Securities and
Exchange Commission, then such financial statements shall
be provided through a copy of their latest annual report on
Form 10K. For all subsequent quarters, the Proposer shall
provide a copy of any report filed on Form 10Q or Form 8-K
which has been filed since the latest filed 10K.
iv)
Credit Ratings - Appropriate credit ratings by at least two of
the following three rating agencies - Fitch, Moody’s or
Standard and Poor’s - must be supplied for the Proposer, all
Equity Members and any Financially Responsible Party, to
the extent such entities have credit ratings. If no credit
ratings exist, include a statement specifying that no credit
ratings exist for that entity.
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Appendix C – Financial/Price Proposal Instructions
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v)
Material Changes in Financial Condition - A letter from
the chief executive officer, chief financial officer or treasurer
for each of Proposer, Equity Members and any Financially
Responsible Party, either (a) providing information on any
material changes in financial condition since submission of
the SOQ and those that are pending, or (b) certifying that no
such material changes have occurred. Additionally, the
Proposer shall be required to provide updated information
following the Proposal Due Date about such entities as such
information becomes public.
References to the notes in the financial statements are not
sufficient to address the requirement to discuss the impact of
material changes.
vi)
Off-Balance Sheet Liabilities and Other Commitments A letter from the certified public accountant, chief financial
officer or treasurer for each entity for which financial
information is submitted, identifying all off-balance sheet
liabilities and other commitments in excess of $25 million
dollars in the aggregate. References to the notes in the
financial statements are not sufficient to address the
requirement to discuss off-balance sheet liabilities.
The information required under this Section C3.2 (Financial Capacity Information for Section 1 of
the Financial/Price Proposal) shall be packaged separately for each separate entity with a cover
sheet identifying the name of the organization and its role in the Proposer’s organization.
Financial statements shall be provided in electronic, searchable "PDF" and Microsoft Word
format, in addition to “hard-copy” submissions as part of the Financial/Price Proposal.
C4.0
Performance Guarantee Pass/Fail Evaluation Factor
C4.1
Objective
To identify Proposers with demonstrated the ability to provide a performance guarantee that
demonstrates a capability to undertake the associated Contract.
C4.2
Performance Guarantee Information for Section 2 of the Financial/Price Proposal
The successful Proposer will be required to furnish, at its own expense, a performance guarantee
in the following forms:
A)
An irrevocable letter of credit in the amount of $20 million in the form approved by
the MBTA and included in Appendix 2 to Schedule 2 of the Operating Agreement;
and
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RFP No. 159-12
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B)
In addition to an irrevocable letter of credit, a parent company guarantee, meeting
the requirements set forth in Appendix 2 to Schedule 2 of the Operating Agreement.
The successful Proposer will be required to deliver the appropriate evidence of the performance
security to the MBTA prior to the Commencement Date.
1)
The Proposer shall submit a letter of commitment from a Qualified Bank
indicating that the Proposer will provide an irrevocable letter of credit in the
amount of $20 million and meeting the requirements of Appendix 2 of
Schedule 2 of the Operating Agreement. The Qualified Bank submitting
such letter must have an underlying rating of A+ or better by Standard &
Poor's Ratings Services, a division of McGraw-Hill Companies, Inc. and
Aa3 or better by Moody's Investors Service, Inc.
2)
The Proposer shall submit written confirmation from each Guarantor,
stating that it is willing to provide a parent company guarantee in relation to
the Contract and meeting the requirements of Appendix 2 to Schedule 2 of
the Operating Agreement. The Guarantor is hereby notified that it will be
precluded from transfer of this guaranty to any other person or entity
without the prior express written approval of the MBTA, which approval the
MBTA may grant, withhold, or qualify in its sole and absolute subjective
discretion.
C5.0
Firm Fixed Price
C5.1
Objective
To identify the reasonable, responsible firm fixed price that is most advantageous to the
Massachusetts Bay Transportation Authority.
C5.2
Firm Fixed Price Information for Section 3 of the Financial/Price Proposal
The Proposer shall submit a firm fixed price using Form FFP (Firm Fixed Price). The Proposer
shall comply with the following instructions in submitting Form FFP (Firm Fixed Price):
A)
The Proposer may expand the level of detail provided within Form FFP (Firm
Fixed Price) beyond the minimum level of detail currently shown on the form. Any
such change must be carried out in a manner that is consistent with the current
format of Form FFP (Firm Fixed Price);
B)
Any costs deemed unable to fit into allocated cost headings may be distributed into
the rows labeled “Spare,” but deleting or inserting rows into the template is not
permitted other than for purposes of including additional "Spare" rows to the
template;
C)
For each year on Form FFP (Firm Fixed Price) (Years 1 through 8), the Proposer
shall input Proposal prices in nominal dollars;
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Appendix C – Financial/Price Proposal Instructions
RFP No. 159-12
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D)
The Proposer shall submit a separate Proposal price for Years 1 through 8,
therefore, the Proposer shall submit a separate Form FFP (Firm Fixed Price) for
each of Years 1 through 8;
E)
The Proposer shall not submit a Proposal price for Years 9 through 12, however,
prices for Years 9 through 12 will be included in the evaluation of the
Financial/Price Proposal. The MBTA will take the Year 8 Proposal price and apply
an inflation factor of 3.477% for each of Years 9 through 12 to calculate the total
firm fixed price. The inflation factor of 3.477% is a blended rate based on
historical 10-year averages for several indexes. This rate is for the Financial/Price
Proposal evaluation only and is not the rate that will be applied for Years 9 through
12 upon Contract execution;
F)
For staff, the benefits uplift should be applied to wages or salary only. Overtime
should be added in addition to wages/salary and benefits uplift;
G)
Allowances will be completed by the MBTA and should not be input by the
Proposer into Form FFP (Firm Fixed Price). The MBTA will provide the same
allowances to all Proposers;
H)
Form FFP (Firm Fixed Price) will ultimately be appended to the Contract as an
exhibit. The firm fixed price shall include the Proposer's profit for all work under
the Contract; and
I)
The firm fixed price identified on Form FFP (Firm Fixed Price) shall be the full
firm fixed price for the performance of the Contract, including delivery charges and
all taxes, direct and indirect, and includes all premiums on bonds, labor and
material costs, patent royalties, and all other charges of every kind and nature.
The Proposer shall also provide the detailed back-up information regarding the basis for the
Proposer’s cost estimates for providing Commuter Rail Services. For each year, information
should address, but not be limited to, annual inflation rate assumptions, number of hours worked
per year per staff, wage/salary rates, benefits uplift, identification of where contingency has been
included, profit, and projected annual labor rate increases. The cost and pricing data shall include
copies of all offers as well as all data and information received from all subcontractors identified
in the Proposal and any other potential subcontractors that provided data and information used as
the basis for the firm fixed price. The cost and pricing data shall include supporting data,
technical memoranda, calculations, formulas, unit and materials prices (if applicable), and such
other cost, charge and fee information used by the Proposer in the creation and derivation of its
Proposal. The Proposer shall submit its cost and pricing data in hard copy and, whenever possible,
shall also provide electronic copies. The Proposer shall submit the cost and pricing data in such
format as is used by the Proposer and its subcontractors in connection with the Proposal.
C6.0
Format for Submission of the Financial/Price Proposal
The Proposer shall organize and submit the Financial/Price Proposal in the format shown in Table C1, Financial/Price Proposal, by the Proposal Due Date. Notwithstanding anything to the contrary, the
Proposer shall separate the information submitted in the Financial/Price Proposal by submitting the
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Appendix C – Financial/Price Proposal Instructions
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requisite information for Sections 1 and 2 in separate, sealed envelopes or containers from the
requisite information for Section 3.
TABLE C-1
OUTLINE FOR SUBMISSION OF THE FINANCIAL/PRICE PROPOSAL
Section
Affixed to outside of
sealed container
Section 1
Section 2
Section 3
Description
Form PP Financial/Price Proposal Cover Sheet
FINANCIAL CAPACITY PASS/FAIL EVALUATION
FACTOR INFORMATION
• Most current financial statements; and
• Other information (if required).
PERFORMANCE GUARANTEE PASS/FAIL
EVALUATION FACTOR INFORMATION
Appendix
Reference
C2.0
C3.0
C3.2
C3.2
C
• Surety letter of commitment; and
• Parent company guarantee confirmation.
FIRM FIXED PRICE
• Form FFP (Firm Fixed Price); and
C4.0
C4.2(1)
C4.2(2)
C5.0
C5.2
• Detailed back-up information.
C5.2
• The following Maintenance Cost Schedules for each
fleet identified in Section B5.2(B)(i)-(xvi) of Appendix
B (Operations and Management Proposal Instructions)
to the Instructions to Proposers:
B5.2(B)
• Attachment 1 (MCS for Existing Locomotives (Annual
Fleet Cost and Annual Unit Cost));
• Attachment 2 (MCS for Existing Coaches (Annual Fleet
Cost and Annual Unit Cost)); and
• Attachment 3 (Summary of Annual Costs for Existing
Locomotive and Coach Fleet (Annual Fleet Cost)).
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Appendix C – Financial/Price Proposal Instructions
RFP No. 159-12